Practice Opportunities for Early and Mid-Career Psychotherapists
A Discussion Paper
The Pathway to Practice Opportunities
Private practice for the past 40 years was the predominant career. A few of these providers were trained in State and Federal agencies, and few commercial hospital systems where they were paid a lower wage than licensed providers in private practice. The scarcity of provider supervisors and the inability to bill insurance required providers to endure a longer period of time to become licensed. They often worked with patients who could not afford insurance. In the past 5 years, because of an increasing demand for services, public and private business have grown into groups that provide training and supervision at a lower cost. Formerly referred to as interns or residents, licensing boards designated unlicensed providers as Associates if they are associated with a supervisor and officially working toward licensure. If an organization met state licensing requirements (as a group) the business could employe associates and bill insurance plans for their services. This is an inexpensive and profitable employee. Eventually these providers become licensed and must decide how they want practice.
5 Practice Models and 3 Ways to Be Paid
Each employment model presents unique challenges for psychotherapists. Solo practitioners face financial challenges and administrative burdens of starting a private practice while those working in partnerships must navigate complex dynamics and shared decision-making.
Sole Proprietor vs W-2 Employee vs 1099 Independent Contractor
Sole-Proprietor: Owns and runs their own business, has control over business decisions, pays self-employment taxes, bears personal liability for business debts, and earns income from business profits.
W-2 Employee: Works as an employee for an employer, follows employer’s direction, has taxes withheld by the employer, enjoys limited liability, and earns a steady salary with potential benefits.
1099 Independent Contractor: Provides services as an independent contractor, controls their work arrangements, pays self-employment taxes, can deduct business expenses, bears personal liability for business debts, and earns income from contract payments.
W-2 employees benefit from stability but often lack flexibility and autonomy, and can be forced to see patients with severe and complex problems, leading to provider burnout. Independent 1099 contractors enjoy greater control but must manage variable income, more than one contract, differing referral sources and lack of benefits just like professional in private practice. Venture capital-funded groups hire professionals as 1099 contractors, promising advanced billing, screening, appointment scheduling for providers, and insisting on outcome measurement but impose profit-driven corporate pressures. One out of 6 Venture capital investments fail and investors demand enormous pressure to treat as many patients as possible as quickly as possible to sell the investment for an inflated value. The valuation of these companies can be 4 to 10 times greater than their actual value. Many fail because of the pressure treat far too many patients as possible, and cannot be sold except at a loss to another venture capital group. Whereas group partnerships (non-venture capital groups) prioritize clinical autonomy but may have fewer resources to market and may find it difficult to offer contracts that are unethical and deceptive to Healthplans. Finally, independent practice associations provide collaborative opportunities and autonomy but come with small membership fees and opportunities to associate and protect fellow members. Independent practice associations work for the mutual benefit of their providers striving to use evidence-based practices, patient centered care, and increase quality and improve health at a reasonable cost. Independent Practice Associations are not drive just by the goal of selling their business to a venture capital company.
Psychotherapists must carefully consider their priorities, including flexibility, financial stability, clinical autonomy, and support, to choose the employment model that best aligns with their career goals and personal preferences.
Practice Models
1. Solo Private Practice
Advantages:
Freedom: High level of freedom to practice and care for your patients. Freedom to attend training, mentor new providers, form collaboration and mutual referral networks.
Work Full-Time or Part-Time: Complete flexibility to set part-time hours.
Adjust Schedule: Full control over your schedule, allowing for adjustments as needed.
Patient Selection: Freedom to choose clients based on your preferences and areas of expertise.
Manage Case Mix Severity: Ability to select cases that match your desired level of complexity and stress.
Disadvantages:
Responsibility: Must manage all aspects of the business, including scheduling, billing, and marketing.
Financial Risk: Income can be inconsistent, especially when working part-time.
Isolation: Lack of immediate peer support or supervision.
Problems:
Financial Instability: Income can be inconsistent, particularly when starting out or during slower periods.
Administrative Burden: Providers must handle all aspects of running a business, including billing, marketing, and compliance with regulations.
Professional Isolation: Lack of immediate peer support and supervision can lead to feelings of isolation.
High Start-Up Costs: Setting up a solo practice can require significant initial investment in office space, technology, and marketing.
Examples:
A trauma specialist adjusts their hours to balance work and personal life, choosing clients that match their expertise with an appropriate case mix severity.
A therapist focusing on adolescent mental health works part-time, selecting clients they feel passionate about helping, but handling administrative tasks themselves, paying an office manager to deal with insurance billing.
2. Partnership Practice (group practice)
Advantages:
Freedom: Moderate level of freedom to practice and care for your patients. Depending on the partnership objectives there can be low to high freedom to attend training, mentor new providers, form collaboration and mutual referral networks. Maternity leave may be a benefit.
Work Part-Time: Potential to arrange part-time work within the partnership. Must schedule time off.
Adjust Schedule: Some flexibility in scheduling, though coordinated with partners.
Patient Selection: Some ability to choose clients, though may be influenced by partnership agreements.
Manage Case Mix Severity: Partners can distribute cases according to expertise and preference.
Disadvantages:
Shared Decisions: Must coordinate with partners on scheduling and client selection.
Potential Conflicts: Differences in preferences or work hours may cause friction.
Shared Profits: Earnings are shared, which might be less than solo practice.
Problems:
Potential for Conflict: Differences in vision, management styles, and workload distribution can lead to disagreements between partners.
Shared Earnings: Profits are divided among partners, which can reduce individual earnings compared to solo practice.
Compromised Autonomy: Decisions regarding client selection, scheduling, and treatment approaches must be made collaboratively, potentially limiting individual autonomy.
Complex Dynamics: Navigating the interpersonal dynamics of a partnership can be challenging.
Examples:
Three partners balance full and part-time schedules and distribute clients based on their specialties, reducing individual workload.
Two therapists split their hours and client load to focus on their preferred cases but must agree on shared administrative responsibilities.
3. W-2 Employee in independent Practice
Advantages:
Freedom: Low to moderate level of freedom to practice and care for your patients. Depending on the organization’s management there can be no freedom to attend the training, mentor new providers, form collaboration and create mutual referral networks.
Stable Salary: Regular income with benefits such as health insurance and retirement plans. Maternity leave is a benefit.
Access to Resources: Shared administrative support, office space, and peer consultation.
Collaborative Environment: Opportunities for professional development and peer support.
Disadvantages:
No Part-Time Option: Generally, W-2 employees in private practices are expected to work full-time.
Less Autonomy: Must adhere to the practice’s policies and procedures regarding scheduling and client assignments.
Limited Client Selection: Less flexibility to choose clients based on personal preferences.
Manage Case Mix Severity: Limited control; case mix often determined by the practice's intake process.
Problems:
Lack of Flexibility: Generally expected to work full-time, limiting options for those seeking part-time work. Must schedule limited time off. Maternity leave is a benefit.
Limited Autonomy: Must adhere to the practice’s policies and procedures, reducing control over scheduling and client selection.
Income Caps: Salaries may be capped, limiting earning potential compared to independent practice.
Job Security Concerns: Dependence on the employer for job stability, which can be affected by the practice's financial health.
Examples:
A therapist works full-time for a private practice specializing in marital counseling, enjoying the stability of a regular paycheck and benefits but adhering to the practice’s policies and client assignment.
Another therapist employed full-time at a private clinic appreciates the regular hours and benefits but has limited flexibility in client selection and schedule adjustments.
4. 1099 Independent Contractor in Private Practice
Advantages:
Work Part-Time: Full flexibility to set part-time hours (more often than not).
Adjust Schedule: High level of control over scheduling (more often than not).
Patient Selection: Greater freedom to choose clients and tailor caseload (more often than not).
Manage Case Mix Severity: Ability to accept or decline clients based on severity preference .
Disadvantages:
No Benefits: Lack of health insurance, retirement plans, etc.
Self-Employment Taxes: Responsible for handling taxes and accounting.
Income Instability: Potential for inconsistent earnings.
Problems:
Income Variability: Earnings can be inconsistent, depending on client referrals and seasonal demand.
No Benefits: Lack of health insurance, retirement plans, and other employee benefits.
Administrative Responsibilities: Responsible for self-employment taxes, accounting, and other business tasks.
Lack of Support: Less access to administrative and peer support compared to employees in larger practices.
Examples:
An independent contractor works part-time for several practices, choosing clients and hours that suit them, but handles all their taxes and benefits.
Another therapist chooses their clients and sets a part-time schedule across multiple practices, enjoying flexibility but dealing with inconsistent income.
Group Practice Subcategories
Each subcategory offers unique advantages and challenges, and the best fit depends on the psychotherapist's career goals, preferred work environment, and desired level of autonomy, flexibility, and financial risk.
1. W-2 Employee in Independent Group Practice
Advantages:
Stable Salary: Regular income with benefits such as health insurance and retirement plans.
Access to Resources: Shared administrative support, office space, and peer consultation.
Collaborative Environment: Opportunities for professional development and peer support.
Disadvantages:
No Part-Time Option: Generally, W-2 employees in group practices are expected to work full-time.
Less Autonomy: Must adhere to the group’s policies and procedures regarding scheduling and client assignments.
Limited Client Selection: Less flexibility to choose clients based on personal preferences.
Manage Case Mix Severity: Limited control; case mix often determined by the group's intake process.
Examples:
A therapist works full-time as a W-2 employee at a large group practice specializing in cognitive-behavioral therapy, benefiting from a stable income and comprehensive benefits but following the practice’s guidelines for treatment and client management.
Another therapist, employed full-time at a community mental health group, enjoys the collaborative environment and shared resources but has limited control over their caseload and treatment approaches.
2. 1099 Independent Contractor in Independent Group Practice
Advantages:
Work Part-Time: High flexibility to set part-time hours, allowing better work-life balance.
Adjust Schedule: Greater control over scheduling compared to W-2 employees.
See Patients You Like to Work With: More freedom to choose clients, depending on referrals.
Manage Case Mix Severity: Ability to accept or decline clients based on severity preference.
Disadvantages:
No Benefits: Lack of health insurance, retirement plans, etc.
Income Instability: Potential for inconsistent earnings due to variability in client referrals.
Self-Employment Taxes: Responsible for handling taxes and accounting.
Expect the organization will be sold or go bankrupt.
Examples:
An independent contractor works part-time at multiple group practices, enjoying flexibility in scheduling and client selection but without benefits, sometimes facing periods with fewer client referrals.
Another therapist manages their own part-time schedule and client list across several group practices, balancing flexibility with the challenges of self-employment, including varying referral rates and inconsistent income.
3. Venture Capital Funded Organizational Practice
Advantages:
Work Part-Time: Generally possible, depending on practice policies, but often with structured requirements.
Adjust Schedule: Some flexibility, but likely within a structured framework.
See Patients You Like to Work With: Limited; may need to meet financial targets.
Manage Case Mix Severity: Some control, but influenced by business goals and financial targets.
Disadvantages:
Pressure: To meet financial targets and investor expectations.
Less Clinical Autonomy: Decisions may be driven by corporate policies.
Structured Environment: Flexibility might be limited by business objectives.
Expect the organization will be sold or go bankrupt.
Examples:
A therapist at a venture capital-funded practice with advanced technology is compelled to use measurement technology, must accept appointments made for them, they income may not be stable, and providers must navigate corporate policies and productivity targets which may be hidden until after the contract signed.
Another therapist working part-time with access to a wide network of clients and administrative support appreciates the flexibility but sometimes finds the corporate influence on clinical decisions challenging.
4. Non-Venture Capital Owned Group Practice
Advantages:
Work Part-Time: Typically, more possible and flexible.
Adjust Schedule: More autonomy compared to venture-funded practices.
See Patients You Like to Work With: Greater freedom to select clients.
Manage Case Mix Severity: More control over case selection and severity.
Disadvantages:
Fewer Resources: Potentially limited financial resources for growth.
Lower Earnings: Compared to venture-funded practices.
Technology and Infrastructure: Possible limitations.
Many practice are bought by larger organzations.
Examples:
A therapist works part-time at a practice with significant scheduling flexibility and client selection, though with fewer technological resources.
Another therapist focuses on community mental health with a collaborative environment but faces financial and technological constraints
5. Independent Practice Associations (IPAs)
Advantages:
Work Part-Time: Often possible and flexible within the association.
Adjust Schedule: Significant control over scheduling.
See Patients You Like to Work With: Freedom to choose clients.
Manage Case Mix Severity: Ability to select cases based on severity preference.
Disadvantages:
Membership Fees: Costs associated with joining the IPA.
Administrative Requirements: Need to comply with association policies.
Bureaucracy: Potential for additional administrative tasks.
Examples:
A therapist enjoys part-time flexibility and autonomy in client selection within an IPA, though must pay membership fees and follow association guidelines.
Another therapist works part-time with control over their schedules and clients, benefiting from collective bargaining but requiring participation in administrative processes.
Comparing Different Venture Capital Practice Models
Cerebral
Cerebral is a venture capital-funded mental health platform offering online therapy and medication management services. Cerebral is a telehealth platform offering a patient subscription-based income, medication management, and therapy. However, it enforces strict treatment protocols. Provider and patient data is given to Healthplans. Cerebral profits from data sharing.
Therapists can set their own hours and receive steady client referrals, but must meet productivity targets and adhere to corporate policies. A therapist enjoys the flexibility and steady referrals but finds the corporate influence on clinical decisions challenging.
Example: Extensive documentation and frequent monitoring are required, leading to high risks of moral injury and employment loss.
Advantages:
Work Part-Time: Allows therapists to set their own hours, providing flexibility.
Technology: Access to a robust digital platform for telehealth services.
Client Referrals: Steady stream of clients through the platform.
Support: Administrative support for scheduling, billing, and compliance.
Disadvantages:
Corporate Influence: Clinical decisions and client management may be influenced by corporate policies and investor expectations.
Productivity Pressure: Need to meet specific productivity targets.
Limited Autonomy: Less control over clinical decisions and treatment plans.
Example: A therapist enjoys the flexibility of working part-time and the steady client referrals provided by Cerebral but finds the corporate influence on clinical decisions challenging.
Spring Health
Spring Health integrates digital tools and team collaboration into a comprehensive mental health platform. It offers competitive, variable compensation based on patient volume and provides strong administrative policy. Patients are administered questionnaires by Spring Health. Provider and patient data is given to Healthplans. Spring Health profits from data sharing.
Advantages:
Work Part-Time: Therapists can often set their own hours, allowing for a better work-life balance.
Advanced Technology: Access to a robust digital platform that streamlines scheduling, billing, and telehealth services.
Support and Training: Continuous professional development opportunities and clinical support.
Stable Income: Competitive pay structure and benefits.
Disadvantages:
Financial Targets: Therapists may face pressure to meet productivity goals set by the company.
Corporate Policies: Clinical decisions and autonomy may be influenced by business and investor priorities.
Less Flexibility: Although part-time work is possible, the structure and requirements may limit some scheduling and client selection autonomy.
Example: A therapist appreciates the advanced technological resources and stable income provided by Spring Health but must navigate corporate policies and productivity targets.
Headway
Headway is a venture capital-funded provider platform that connects therapists with clients, providing comprehensive administrative support for billing, insurance, and scheduling. Headway assigns patients with mental health providers, handling billing, and scheduling. Providers enjoy high clinical freedom and low administrative burden. Provider and patient data is given to Healthplans. Headway profits from data sharing.
Example: A therapist may see many clients with flexible treatment methods, facing low to moderate risks of moral injury and organizational sanctions.
A therapist enjoys flexibility and administrative support but sometimes finds the corporate influence on clinical decisions challenging.
Advantages:
Work Part-Time: Flexibility to choose part-time hours, allowing for personalized work schedules.
Client Referrals: Access to a wide network of clients, helping therapists build and maintain their caseload.
Administrative Support: Comprehensive support for billing, insurance, and administrative tasks, reducing the burden on therapists.
Professional Growth: Opportunities for training and development.
Disadvantages:
Income Instability: While Headway provides client referrals, there can be variability in client volume.
Corporate Influence: Some clinical decisions and client management practices may be influenced by the company’s business model and investor expectations.
Structured Framework: Therapists may need to adhere to specific guidelines and policies set by Headway.
Example: A therapist enjoys the flexibility and administrative support offered by Headway, allowing them to focus on their clients but sometimes finds the corporate influence on clinical decisions challenging.
Independent Mental Health Professional Alliance (IMHPA)
Description: IMHPA is an independent practice association (IPA) that supports mental health professionals by providing shared resources, collective bargaining power, and collaboration opportunities with members.
Advantages:
Work Part-Time: Completely flexible within the association.
Adjust Schedule: Total control over scheduling.
Patient Selection: Freedom to choose clients.
Manage Case Mix Severity: Ability to select cases based on severity preference.
Autonomy: More clinical freedom compared to venture-funded organizations.
Support: Access to resources and collaboration with other independent practitioners.
Disadvantages:
Membership Fees: Costs associated with joining the IPA.
Administrative Requirements: Need to comply with association policies.
Bureaucracy: Potential for additional administrative tasks.
Example: A therapist benefits from the part-time flexibility and autonomy in client selection within IMHPA, though must pay membership fees and follow association guidelines.
References
What Do Health Plans Want from Independent Psychotherapists?
https://www.mentorresearch.org/what-do-healthplans-want-from-independent-psychotherapistsThreats to Psychotherapy Practice and Patient Privacy
https://www.AmericanMentalHealth.com/threats-to-practiceDo Venture-Capital Investors Think Psychotherapists are Dumb?
https://www.IMHPA.org/are-psychotherapists-dumbThe Role of Patient Reported Outcome Measures in Mental Health
https://www.mentorresearch.org/the-role-of-patient-reported-outcome-measuress-in-mental-healthHealthplans Want “Integrated Care”: But Where Are All The Psychotherapists?
https://www.IMHPA.org/where-are-the-psychotherapists
DISCLAIMER and PURPOSE: This discussion document is intended for training, education, and research purposes only. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.
For more information see: https://www.mentorresearch.org/disclaimer-and-purpose